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Puerto Rico: The Commonwealth Plays Hardball

posted by Stephen Lubben

The question is whether it is playing against the House of Representatives, and its heavy handed PROMESA draft bill, or its creditors.

In any event, according to the Financial Times, Puerto Rico's legislature has passed a law giving its governor "the power to declare a state of emergency and halt payments to creditors until January 2017."

There is a long history of these sorts of laws in the United States, most from the Nineteenth Century, although there were a few in the Great Depression too.  Most were eventually struck down as violations of the Contracts Clause, but collection against Puerto Rico itself might run up against whatever sovereign immunity the Commonwealth might posses.

Comments

Act 21-2016, Puerto Rico Emergency Moratorium and Financial Rehabilitation Act. English version starts on page 49.

http://www.oslpr.org/2013-2016/%7B6A119621-0D27-4BBD-B92D-2A715E1BB21F%7D.doc

This is like making own laws to save their own interests, which is so not fair

If possible, it would be informative to see a debate between the proposals of Chapter 9 access and a "super bond."

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